Abstract Comprehending the hemopoietic cell niche environment is important in our understanding of hematopoiesis. It has been hypothesized that mesenchymal stromal cells (MSC) establish the hematopoietic niche, but their identification and characterization in vivo has not been accomplished. Current thinking suggests that MSC are derived from perivascular cells. MSC are known to secrete high amounts of stroma- derived factor-1 (SDF1), a chemokine involved in the recruitment and maintenance of hematopoietic cells. We have created the first SDF1 reporter transgenic vertebrate in a zebrafish and previously shown that high-SDF1 secreting cells were, in fact, perivascular cells and contribute to SDF1-recruitment of hematopoietic cells after adoptive transfer. This model allows, for the first time, the isolation of hematopoietic niche cells a priori. We hypothesize that perivascular cells give rise to MSC in the ex vivo culture expansion setting and establish the hematopoietic cell niche environment in vitro and in vivo. The primary aim of this work is to characterize perivascular cells both biochemically and functionally. In specific AIM 1, we will determine the in vitro properties of perivascular cells isolated from the sdf1:DsRed transgenic zebrafish and in specific AIM 2 we will determine the potential of perivascular cells to support hematopoietic cell expansion in vitro. Prior characterization of MSC has been focused on detection of mesodermal markers and mesodermal differentiation (osteogenesis, vasculogenesis, and adipogenesis). Using isolated and cultured perivascular cells we will verify cell surface markers and differentiate them into mesodermal lineages. Furthermore, we will show that perivascular cells can support the growth/maintenance of hematopoietic cells in vitro. The benefit of utilizing a transgenic zebrafish is the visualization of the perivascular cells in vivo and in specific AIM 3, we will determine the role of perivascular cells in the maintenance of the hematopoietic cell niche in vivo. To determine the functional significance of perivascular cells, we will construct an sdf promoter driven diphtheria toxin receptor transgenic fish that will allow targeted ablation of the perivascular niche cells. This will be followed by adoptive transfer of labeled donor marrow to quantify the effects of perivascular niche ablation on homing using both visual microscopic assays and quantitative homing assays. The experimental approach outlined here wills us to better understand the hematopoietic microenvironment.